[Bonanza]

Originally Posted by Bogie Shooter

More info on Bonds:
VCDD Bond FAQs

There is so much more to our bond issues here in TV, than other CDDs in Florida.

In other CDDs residents are also on their CDD board. Here, the CDD is made up of the developer's people ONLY. Since residents have no say, our CDD has taken it upon themselves to pay Mr. Morse's attorney who is defending him against the IRS, out of residents' funds (to the tune of over $700,000 thus far), not his own pocket. We have no say about this, nor will we have any say regarding the fine the IRS will most likely tell Mr. Morse he has to pay, which once again, will come out of residents' pockets.

Here's a little information to digest:

The CDD framework in the first six years allows developers to control the decision-making process because they are the primary property owner, and one vote is allocated for each acre owned in the district. The developer can elect supervisors who are his employees, associates or friends, who then can make decisions for the benefit of the developer.[4] Until the residents own property greater than 33% of total votes, they may not have a single representative on the BoS. Only when the residents own property greater than 50% of total votes will they have an opportunity to outvote the supervisors chosen by the developer. While the developer controls the BoS, he or she may direct the board to purchase the common property from the developer at highly inflated values determined by special appraisers, who use an income approach appraisal method rather than the standard, cost approach. This is legal because the appraisal is approved by the BoS. The district manager, hired by the BoS, may administrate for the interests of the developer rather than the residents.

In January 2008, the Villages Center CDD (VCCDD) was notified by the Internal Revenue Service of the IRS' intent to audit several recreational bonds issued in 2003 to determine compliance with tax regulations (mainly due to their status as municipal bonds which are exempt from Federal income tax). The IRS sent three "Notices of Proposed Issues" in January 2009 challenging the tax-exempt status of the bonds on three grounds:
1.the Issuer does not qualify as a political subdivision or "on behalf of the issuer" of tax-exempt bonds pursuant to Section 1.103-I(b) of the Internal Revenue Code regulations,
2.the opinions of value do not support the price paid by the Issuer to the developer for the Series 2003 Facilities and the payment of the sales price for the facilities to the developer by the Issuer is not a governmental use of the proceeds of the Bonds, and
3.the Bonds are private activity bonds the interest on which is not excludable under IRS Section 103.

The position stems in large part from the interrelationship between VCCDD and The Villages developers (since VCCDD has no residents, the Board of Supervisors consists solely of individuals who work for or have an affiliation with The Villages developers, and VCCDD's infrastructure was purchased by the developers-controlled board from the developers). Essentially, the IRS position is that the VCCDD is an "alter ego" for the developers.